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“ Hackers Beware “ New Riders Publishing

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Hackers Beware
Eric Cole
Publisher: New Riders Publishing

First Edition August 13, 2001

ISBN: 0-7357-1009-0, 800 pages


A good defense starts with a thorough understanding
of your opponent’s offense. Hackers Beware teaches
you how hackers think, what tools they use, and the
techniques they utilize to compromise a machine. Eric
Cole, a leading expert in information security, shows
you not only how to detect these attacks, but what
you can do to protect yourself against them. When it
comes to securing your site, knowledge is power. This
book gives you the knowledge to build a proper
defense against attackers.

Copyright © 2002 by New Riders Publishing
FIRST EDITION: August, 2001

All rights reserved. No part of this book may be reproduced or transmitted
in any form or by any means, electronic or mechanical, including
photocopying, recording, or by any information storage and retrieval
system, without written permission from the publisher, except for the
inclusion of brief quotations in a review.
Library of Congress Catalog Card Number: 00102952
06 05 04 03 02 7 6 5 4 3 2 1
Interpretation of the printing code: The rightmost double-digit number is
the year of the book’s printing; the right-most single-digit number is the
number of the book’s printing. For example, the printing code 02-1 shows
that the first printing of the book occurred in 2002.
Composed in Bembo and MCPdigital by New Riders Publishing
Printed in the United States of America
Trademarks
All terms mentioned in this book that are known to be trademarks or
service marks have been appropriately capitalized. New Riders Publishing
cannot attest to the accuracy of this information. Use of a term in this
book should not be regarded as affecting the validity of any trademark or
service mark.



“ Hackers Beware “ New Riders Publishing

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Warning and Disclaimer
This book is designed to provide information about computer security.
Every effort has been made to make this book as complete and as
accurate as possible, but no warranty or fitness is implied.
The information is provided on an as-is basis. The authors and New Riders

Publishing shall have neither liability nor responsibility to any person or
entity with respect to any loss or damages arising from the information
contained in this book or from the use of the discs or programs that may
accompany it.
Credits
Publisher
David Dwyer
Associate Publisher
Al Valvano
Executive Editor
Stephanie Wall
Managing Editor
Kristy Knoop
Product Marketing Manager
Stephanie Layton
Publicity Manager
Susan Nixon
Acquisitions Editor
Jeff Riley
Development Editors
Katherine Pendergast
Joell Smith



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Project Editor
Sean Monkhouse

Copy Editors
Kelli Brooks
Sarah Cisco
Indexer
Christine Karpeles
Manufacturing Coordinator
Jim Conway
Book Designer
Louisa Klucznik
Cover Designer
Aren Howell
Proofreaders
Katherine Shull
Mitch Stark
Composition
Amy Parker
Rebecca Harmon
I would like to dedicate this book to my wonderful son, Jackson. He is a
blessing to me and brings joy and happiness to me every day.
Hackers Beware

About the Author

About the Technical Reviewers


Acknowledgments

“ Hackers Beware “ New Riders Publishing

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Tell Us What You Think

Introduction


1. Introduction

The Golden Age of Hacking

How Bad Is the Problem?

What Are Companies Doing?

What Should Companies Be Doing?

Defense in Depth

Purpose of This Book

Legal Stuff

What’s Covered In This Book

Summary

2. How and Why Hackers Do It

What Is an Exploit?

The Attacker’s Process

The Types of Attacks

Categories of Exploits

Routes Attackers Use to Get In

Goals Attackers Try to Achieve

Summary


3. Information Gathering

Steps for Gathering Information

Information Gathering Summary

Red Teaming

Summary


4. Spoofing

Why Spoof?

Types of Spoofing

Summary


5. Session Hijacking

Spoofing versus Hijacking

Types of Session Hijacking

TCP/IP Concepts

Detailed Description of Session Hijacking

ACK Storms

Programs That Perform Hijacking

Dangers Posed by Hijacking

Protecting Against Session Hijacking

Summary


6. Denial of Service Attacks

What Is a Denial of Service Attack?

What Is a Distributed Denial of Service Attack?

Why Are They Difficult to Protect Against?

Types of Denial of Service Attacks

Tools for Running DOS Attacks

Tools for Running DDOS Attacks

Preventing Denial of Service Attacks

Preventing Distributed Denial of Service Attacks

Summary




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7. Buffer Overflow Attacks

What Is a Buffer Overflow?

How Do Buffer Overflows Work?

Types of Buffer Overflow Attacks

Why Are So Many Programs Vulnerable?

Sample Buffer Overflow

Protecting Our Sample Application

Ten Buffer Overflow Attacks

Protection Against Buffer Overflow Attacks

Summary


8. Password Security

Typical Attack

The Current State of Passwords

History of Passwords

Future of Passwords

Password Management

Password Attacks

Summary


9. Microsoft NT Password Crackers

Where Are Passwords Stored in NT?

How Does NT Encrypt Passwords?

All Passwords Can Be Cracked (NT Just Makes It Easier)

NT Password-Cracking Programs

Comparison

Extracting Password Hashes

Protecting Against NT Password Crackers

Summary


10. UNIX Password Crackers

Where Are the Passwords Stored in UNIX?

How Does UNIX Encrypt Passwords?

UNIX Password-Cracking Programs

Comparison

Protecting Against UNIX Password Crackers

Summary


11. Fundamentals of Microsoft NT

Overview of NT Security

Availability of Source Code

NT Fundamentals

Summary


12. Specific Exploits for NT

Exploits for NT

Summary


13. Fundamentals of UNIX

Linux

Vulnerable Areas of UNIX

UNIX Fundamentals

Summary


14. Specific Exploits for UNIX




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UNIX Exploits
Summary


15. Preserving Access

Backdoors and Trojans

Rootkits

NT Backdoors

Summary

16. Covering the Tracks

How To Cover One’s Tracks

Summary


17. Other Types of Attacks

Bind 8.2 NXT Exploit

Cookies Exploit

SNMP Community Strings

Sniffing and Dsniff

PGP ADK Exploit

Cisco IOS Password Vulnerability

Man-in-the-Middle Attack Against Key Exchange

HTTP Tunnel Exploit

Summary


18. SANS Top 10

The SANS Top 10 Exploits

Commonly Probed Ports

Determining Vulnerabilities Against the SANS Top 10

Summary


19. Putting It All Together

Attack Scenarios

Summary


20. Summary

Security Cannot Be Ignored

General Tips for Protecting a Site

Things Will Get Worse Before They Get Better

What Does the Future Hold?

Conclusion


A. References

Hacker/Security Related URLs

Hacker/Security Tools

General Security Related Sites




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About the Author

Eric Cole (CISSP, CCNA, MCSE) is a former Central Intelligence Agency (CIA) employee
who today is a highly regarded speaker for the SANS Institute. He has a BS and MS in
Computer Science from New York Institute of Technology and is finishing up his Ph.D. in
network security—emphasizing intrusion detection and steganography. Eric has extensive
experience with all aspects of Information Security, including cryptography,
steganography, intrusion detection, NT security, UNIX security, TCP/IP and network
security, Internet security, router security, security assessment, penetration testing,
firewalls, secure web transactions, electronic commerce, SSL, IPSEC, and information
warfare. Eric is among SANS’ highest-rated instructors; he has developed several courses
and speaks on a variety of topics. An adjunct professor at Georgetown University, Eric
also has taught at New York Institute of Technology. He also created and led Teligent’s
corporate security
About the Technical Reviewers
These reviewers contributed their considerable hands-on expertise to the entire

development process for Hackers Beware. As the book was being written, these
dedicated professionals reviewed all the material for technical content, organization, and
flow. Their feedback was critical to ensuring that Hackers Beware fits our reader’s need
for the highest quality technical information.
Scott Orr has been involved with the networking efforts of the Purdue School of
Engineering and Technology at Indiana University-Purdue University at Indianapolis from
the very beginning. Starting out as a 20-node Novell network, it expanded to include
more the 400 Microsoft-and UNIX-based workstations within several years. Since then,
he moved over to the computer science department where he manages all student and
research lab PC and UNIX clusters. In addition, he teaches an undergraduate course and
conducts research in the areas of system administration, networking, and computer
security. Scott has also made numerous presentations to local industry on the
deployment of Internet security measures and has assisted several large corporations
with the configuration and testing of their firewalls.
Larry Paccone is a Senior National/Systems Security Analyst at Litton/TASC. As both a
technical lead and project manager, he has worked in the Internet and network/systems
security arena for more than seven years. He has been the technical lead for several
network security projects supporting a government network/systems security research
and development laboratory. Prior to that, Larry worked for five years at The Analytical
Sciences Corporation (TASC) as a national security analyst assessing conventional
military force structures. He has an MS in information systems, an M.A. in international
relations, and a B.A. in political science. He also has completed eight professional
certifications in network and systems security, internetworking, WANs, Cisco routing, and
Windows NT.



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John Furlong is an independent Network Security Consultant based in Dallas, Texas.
After graduating from a university in England as a systems programmer, John
immigrated to the United States. After extensive development of IDS signatures and
modular software for business environments utilizing the Aggressor security suite, John
opened his own consulting firm in 1998. John continues to develop and educate business
professionals on the growing need for intranet and Internet security. As a freelance
consultant, John has provided remote storage systems for security conscious industries,
such as medical and insurance affiliations, and enhanced and strengthened operating
systems for numerous Internet service providers.
Steve Smaha is an Austin-based angel investor and philanthropist. Previously he was
founder and CEO of Haystack Labs, Inc., an early developer of Internet security software,
until its acquisition in October 1997 by Trusted Information Systems (TIS). At TIS, Steve
served as Vice President for Technology until TIS was acquired by Network Associates in
April 1998. Since 1998, he has served on several computer company boards of directors
and technical advisory boards and is actively involved in mentoring startup tech
companies and working with non-profit organizations. He is married with a young child.
His undergraduate degree is from Princeton University and graduate degrees are from
the University of Pittsburgh and Rutgers University.
Patrick “Swissman” Ramseier, CCNA, GSEC, CISSP, is a Security Services Director for
Exodus Communications, Inc. Exodus is a leading provider of complex Internet hosting
for enterprises with mission-critical Internet operations. Patrick started as a UNIX system
administrator. Over the past 13 years, he has been involved with corporate-level security
architecture reviews, vulnerability assessments, VPN support, network and operating
system security (UNIX-Solaris, Linux, BSD, and Windows NT/2000), training, research,
and development. He has a B.A. in business and is working concurrently on his masters
and doctorate in computer science
Acknowledgments
I wanted to thank New Riders for the help and support through this process. Mainly Jeff
Riley, Katherine Pendergast, and Sean Monkhouse. They are a great publisher to work
with.

I also wanted to thank SANS for having such a great organization. Alan Paller and
Stephen Northcutt are wonderful people to work with and very helpful. They gave great
advice and support through the entire process. Also, I want to thank all of the SANS
GIAC students who provided excellent information via their practicals.
What always makes me nervous with acknowledgement sections is the thought that I am
overlooking someone. When the book comes out I am going to remember who I forgot.
So I am going to leave a blank line, so whoever I forgot can write their name into this
section __________________________________________.
Now on to all of the great friends and family I have that have helped me through this
process. Tony Ventimiglia, who has provided great editing support and who has been a
great friend through thick and thin. Mathew Newfield, who has helped out in numerous
ways—probably even in some ways that he doesn’t even know about. Jim Conley, who
provided editing and guidance. Gary Jackson, who provides continual guidance, wisdom,
knowledge and is a great friend. Marc Maloof, who has provided guidance and direction.
Most of all, I want to thank God for blessing me with a great life and a wonderful family:
Kerry Magee Cole, a loving and supportive wife; my wonderful son Jackson, who brings
joy and happiness to me everyday; Ron and Caroline Cole, and Mike and Ronnie Magee,



“ Hackers Beware “ New Riders Publishing

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have been great parents to me—offering tons of love and support. I’d also like to thank
my wonderful sister, brother-in-law, nieces, and nephews: Cathy, Tim, Allison, Timmy,
and Brianna.
For anyone who I forget or did not mention by name, I thank all of my friends, family
and co-workers who have supported me in a variety of ways through this entire process.
Tell Us What You Think
As the reader of this book, you are the most important critic and commentator. We value

your opinion and want to know what we’re doing right, what we could do better, what
areas you’d like to see us publish in, and any other words of wisdom you’re willing to
pass our way.
As the Executive Editor for the Web Development team at New Riders Publishing, I
welcome your comments. You can fax, email, or write me directly to let me know what
you did or didn’t like about this book—as well as what we can do to make our books
stronger.
Please note that I cannot help you with technical problems related to the topic of this
book, and that due to the high volume of mail I receive, I might not be able to reply to
every message.
When you write, please be sure to include this book’s title and author as well as your
name and phone or fax number. I will carefully review your comments and share them
with the author and editors who worked on the book.
Fax: 317-581-4663
Email:
Mail: Stephanie Wall
Executive Editor
New Riders Publishing
201 West 103
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Street
Indianapolis, IN 46290 USA
Introduction
With so much going on in regard to network security (or the lack thereof), a book on this
topic almost needs no introduction. Less than 10 years ago, most people didn’t even
know what the Internet or email was. To take a further step back, most people did not
even have computers at work or home, and some even questioned their usefulness.
Things have really changed. As I am writing this, the Carousel of Progress ride at Disney
World goes through my mind. Things that we considered science fiction a decade ago are
not only a reality, but an engrained part of our life. Heck, if the dedicated line at my

house goes down for more than 30 minutes, my wife is screaming at me to fix it. This is
truly the age of computers.
From a functionality standpoint, computers are great when they are stand-alone devices.
If I have a computer in my home with no network connection, do I really need any
computer security? The house usually provides enough security to protect it. But now
that everyone is connecting their computers together via the Internet, we are building
this web of trust where everyone trusts everyone else. There is just one problem:
everyone does not trust everyone else. Yet, in most cases, we are giving everyone full
access to this information. At this point, let’s step back and look at how this happened.



“ Hackers Beware “ New Riders Publishing

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This happened because people got so caught up in technology and functionality that no
one worried about security—yet security is critical in this day and age.
Ten years ago when I worked in security, I remember that no one wanted anything to do
with me. The security guy was like the smelly kid in school. No one would sit next to me
at meetings. No one would even want to go to lunch with me out of fear that his
manager would see him with the security psycho, and he wouldn’t get that big
promotion. Why did people hate security so much? People did not see the value of
security; they thought it was a waste of money and did not think the threat was real.
With most other technologies, there is an immediate tangible benefit. For example, you
can directly see the benefit of installing a new network or a new server for a company—
faster access, more storage space, more efficient calculations, and so on. With security,
there is no direct benefit, only an indirect benefit—your data and information will be
secure. In most cases, a company does not realize the benefit of security until it is too
late. Only after an attacker breaks into its system and steals $10 million does a company
see the need for security and becomes willing to pay the money. Think of how much

money the company would have saved if it had invested in security originally.
As more and more companies suffer losses, hopefully, more and more companies will
start investing in security from the beginning and not wait for a major breach in security
to realize how much they need it. Think about car insurance. Everyone who buys a car
gets insurance immediately, just in case an accident occurs. I know people who have
never been in an accident for 30 years and still get insurance because they know that it
is cheaper to have insurance and not have an accident than not have insurance and get
into an accident. Companies need to use the same logic with security. No matter what
size company you are or what type of business you do, security is always a wise
investment.
No systems are safe. Any system that is connected to the Internet is getting probed and
possibly broken into. If you do not believe me, run the following simple experiment.
Because most home computers have either direct connections or dial-up connections,
you can use your home computer for this experiment. Purchase or download one of the
personal firewall products that are available on the Internet. There are several programs
out there, but Zone Alarm, available from www.zonelabs.com
, has a free version for non-
commercial use. Install the program on your system, keep your system up for at least 48
hours, and get ready to be amazed. Usually within less than two days, your systems will
be probed several times and even broken into. For example, I called up an ISP, received
an IP address, connected, and within 30 minutes, I received over five probes of the
system. Think about this for a minute. If your home computer, with no domain name,
that no one cares about, gets probed and attacked, what does that say for a company? It
basically says that systems will be attacked, and without good security, they will be
broken into and compromised.
I have had companies tell me that they have never had an attempted attack against their
systems. That statement is false. The correct statement is that they have never had an
attempted breach that they detected. Just because you are looking in the wrong places
does not mean that your site is secure. It is critical that companies know the right places
to look and the proper way to secure their systems. Hopefully, this book will show you

what attackers are up to and give you insight into their tools and techniques so that you
can look in the right places and better defend your sites.
Remember, the best way to have a good defense is to understand the offense. That is
the main goal of this book: to make people aware of the techniques, methods, and tools
attackers are using to compromise systems and use that knowledge to build secure
networks. Security cannot be done in a vacuum; you must understand what the threat is.
In this field, ignorance is deadly and knowledge is power.



“ Hackers Beware “ New Riders Publishing

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Hopefully, this book will give you insight into hackers and how you can protect against
them. Securing a network is a never-ending journey; but based on my experience, it is a
very enjoyable and rewarding journey. Let’s get started on our journey into the
wonderful world of network security.
Chapter 1. Introduction

No matter what field you work in, you cannot help but notice the impact that the Internet
has had on society. It has opened up opportunities and markets that people only
dreamed of before.
As with any new technology, there is always a positive and negative aspect. The positive
side is the tremendous business opportunities. The negative side is the huge security risk
that is now posed to so many companies, yet few companies are truly aware of the
potential danger. It’s like getting in a brand new car and driving down the road at
80mph, only to realize that the engineers did not equip the car with breaks. If this did
occur and a large number of people bought the car, the net result would be a high
number of fatalities because the proper breaking was not built into the car. The same
thing is occurring with the Internet. Now that companies have invested millions of dollars

in this new infrastructure, they realize that security was not properly built in, and now
their entire companies are vulnerable.
The point of this book is that there is no way to properly protect a company’s network
unless you know what you’re up against. Only by understanding how attacks work and
what an attacker does to compromise a machine can a company position itself so that it
can be properly protected. If someone tells you to protect a site against a certain threat
and you don’t understand what the threat is or how it works, you cannot protect against
it. Knowing what an attacker can do to compromise your system and what that
compromise looks like on a network allows you to build a secure system.
Although this book goes into techniques used to hack a machine and perform common
exploits, it is not meant to be a handbook on how to hack. It is meant to help a company
properly close up its vulnerabilities and protect its computers. I want to make you aware
of the tools that are available and how easy they are to use, and I want to show you
what a company must do to have a secure network.
The Golden Age of Hacking
Based on everything we know, this truly seems to be the golden age of hacking. To sum
things up, it is a great time to be a hacker. Because there are so many possible systems
to break into and most of them have such weak security, attackers can pick and choose
which machines to go after. To make matters worse, most companies have insufficient
information or resources to track these attackers, so even if they are detected, their
chances of getting caught are slim. No one polices the Internet, and in terms of
knowledge and experience, attackers have the upper hand. Not only is it a good time to



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be a hacker, but it is a good time to be a security professional. There is plenty of work
and a whole lot of challenges ahead.

A recent and well-known example of hacking attacks happened in February of 2000.
Several large sites on the Internet were attacked within in a short period of time. The
type of attack was a distributed Denial of Service attack in which company web sites
became unreachable to legitimate users. These attacks will be discussed in detail in
Chapter 6
, “Denial of Service Attacks.” From a business perspective, this had a large
impact on the victim companies. For one company, an online bookstore, the attack
resulted in lost revenue—not only did the company lose sales, but it lost customers.
Let’s look at an example. If a customer, intending to buy something online, tries to
connect to a company’s web site at 10:00 p.m. and the web browser displays the
message “Web Site Unavailable,” he might try back at 10:45 p.m. When the customer
tries again at 11:30 p.m. and still receives the same message, more than likely, the
customer will go to a competitor to buy the product. With the amount of competition on
the Internet, if a customer cannot access a site in a matter of seconds, he will quickly
give up and go to a different site.
Ironically, companies were so afraid of the Y2K problem that they dumped large sums of
money into fixing it. In several cases, it seemed like a waste because the problem was
overestimated and hyped by the media. Now there is a problem far worse, but companies
are looking the other way. They do not want to invest the money.
There are several reasons why so many companies are vulnerable, but one of the main
reasons is lack of awareness. Companies have not realized and still do not realize the
threat. One of my goals in writing this book is to make people aware of the threat and
the tools that exist to protect their sites. Ignorance is deadly, but knowledge is power. If
an attacker breaks into your house with an arsenal of guns and you have no weapons,
you cannot defend yourself. On the other hand, if you are properly trained on weapons
and know the limitations of the weapons the intruder is using, you have an upper hand.
This is the exact purpose of this book. Giving IT professionals the tools and techniques
attackers use to break into sites, equips them with the proper defenses.
How Bad Is the Problem?
To list all the sites that have been hacked would take up several pages, if

not an entire book. This section is meant to give a sample of some of the
sites that have been hacked to illustrate how bad the problem is.
The examples that follow, which were taken directly off the Internet,
range from commercial to government sites, national to international, and
entertainment to not-for-profit sites. No one is safe. No market has been
spared from hacking. Any company can be hacked if it is connected to the
Internet, no matter where it is or what it does. The following is a list of
some sites that have been hacked:
•
U.S. Department of Commerce
•
Church of Christ
•
Unicef
•
Valujet
•
NASA



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•
United States Air Force
•
CIA
•
Malaysian Government

•
Greenpeace
•
Tucows
•
Philippine’s IRS
•
Star Wars
•
Six Flags
•
Cartoon Network
•
University of Texas
•
NY Times
•
Dominos
•
Comdex
•
Motorola
•
FOX
Most of these were web site attacks where an attacker went in and
changed the content—also known as web graffiti attacks. Because these
were web graffiti attacks, it was fairly obvious that the sites were
compromised. With attacks where information is acquired in a less obvious
way, there is a good chance that you would not know about it. If you
search on the web for hacked sites, or similar terms, you can see a wide

range of graffiti attacks. Just be warned that several of them could be
offensive to just about anyone.
The following is an example of a web site hack of a major search engine.
When users connected to the search engine’s URL, instead of receiving the
normal web site, they received the following:
P4NTZ/H4GiS - W0RLD D0M1N4T10N '97

For the past month, anyone who has viewed this page & used
their search engine,
now has a logic bomb/worm implanted deep within their
computer.

The worm part of this 'virus,' (in layman's terms) spreads
itself across internal
networks that the infected machine is on.

Binary programs are also infected.

On Christmas Day, 1997, the logic bomb part of this 'virus,'
will become active,
wreaking havoc upon the entire planet's networks.

The virus can be stopped.




“ Hackers Beware “ New Riders Publishing

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But not by mortals.
Most people correctly assumed that the warning was a hoax, but it still
caused a lot of fear and confusion. This type of hack raises the interesting
question of “what if?” What if a popular site on the web was infected with
something like this? Think of the effect it could have.
General Trends
Because this book is about protecting against hackers or attackers, it is
important to look at what is occurring from an Internet security
perspective. Based on my experience, the Internet is an attacker’s gold
mine. Basically, attackers can break into whatever system they want with
relative ease, and the chances of getting caught are slim to none. To
make matters worse, complex attacks are being coded up so that anyone
can run these exploits against systems any time they want. Now, an
attacker with minimal experience can break into sites just like the experts.
The Internet grew so quickly that few gave any thought to security. We
now have an epidemic on our hands, and things will get worse before they
get better. Attackers have the upper hand and it will take a while before
companies secure their systems. The best thing for companies to do is
disconnect from the Internet until their systems are secure, but no one
will do that.
The other thing that makes matters worse is how companies have built
their networks. In the past, every company’s network and systems were
different. In the late 80s, companies hired programmers to customize
their applications and systems, so if an attacker wanted to break into your
network, he had to learn a lot about your environment. Your information
did not help the attacker when he tried to break into another company’s
network, because its systems were totally different. Now, every company
uses the same equipment with the same software. If an attacker learns
Cisco, Microsoft, and UNIX, he can break into practically any system on
the Internet. Because networks are so similar, and software and hardware

are so standardized, the attacker’s job is much easier.
You can argue that this also makes the security professional’s job easier
because after we learn how to secure a system, we can share it with
everyone else. There are two problems with this. First, for some reason,
the bad guys love to share, but the good guys do not. If security
professionals learned to share, the world would be a safer place. Second,
even though the operating systems and applications are the same, the
way they are configured is quite different. From an attacker’s standpoint,
that difference is insignificant; but from a security stance, it is quite
significant. Just because server A is running NT and is properly secured



“ Hackers Beware “ New Riders Publishing

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does not mean that you can clone that configuration to server B, because
it is usually configured differently.
To better understand the problem, take a look at a security breach. About
a year ago, a group of hackers was “testing” the security of various banks
and noticed that one was extremely vulnerable. In a couple of hours, they
transferred over $10 million dollars from the bank to a private account.
Because the bank had such lax security, the attackers were able to hide
their tracks so that the attack was very difficult for the bank to detect, let
alone trace who committed the crime. In addition, the attackers did not
directly attack the bank from their computers; they hopped through
several other sites, which made the task of tracking them more difficult.
Although the attackers knew that the chance of getting away with their
crime was very high, they began to feel apprehensive and wanted to
ensure that there was no chance of getting caught or being prosecuted. To

ease their concerns, shortly after the attack, the attackers called the bank
and made an appointment with the president to explain themselves and
their security attack. They went into his office and explained to him who
they were and what they had done. The attackers proposed two solutions
to the president. First, they told the president that the bank could try to
prosecute. However, the attackers said they would deny everything,
including their conversation. The attackers said that the attack was so
smooth the bank would not find enough information to put them in jail.
Furthermore, the attackers made it clear that if the bank did go forward
with prosecution, they would make sure that every radio station,
television network, and newspaper would run reports about the bank
robbery and how easy it was to steal the bank’s money. The bank would
lose even more money in lost customers because of the bad publicity. The
bank’s second option, the attackers continued, was to sign a proposal,
which would indicate that the attackers were performing a security
assessment at the bank’s request for the fee of $5 million dollars. Then,
the attackers would return the remaining $5 million dollars.
Do you want to guess what the president did? In a matter of two minutes,
he signed the document and recovered half of the bank's money.
Unfortunately, this story is true. Attackers have the upper hand and
companies are at the mercy of these attackers. In this example, the
president of the bank made a wise choice by minimizing the bank’s losses.
With the solution he picked, the bank lost $5 million dollars. If the bank
tried to prosecute, not only would it have not recovered the $10 million
dollars, but it would have lost additional money due to bad publicity.
Companies have to realize that, until they implement proper security,
attackers can compromise their networks and possibly control their
companies.

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Systems Are Easy to Break Into
The people performing the current attacks have a wide range of skill and
experience. On one end are the script kiddies who have a lot of time but
low expertise, and on the other end are the experienced hackers who
have a high level of expertise. It is unfortunate, but security at most
companies is so poor that attacks requiring low expertise are highly
successful. Even worse is that most of the script kiddies who are running
the attacks do not understand what they are doing. They download some
executable or scripts, run them, and are either given a prompt on a
machine or an account that has domain administrator access. An average
user who understands the basic features of an operating system, such as
logging on, and can use a mouse and keyboard, can perform the steps
that are required to perform these attacks.
Most houses avoid break-ins because they put in the basic measures to
protect themselves from the average thief, not because they have Fort
Knox’s security. A very sophisticated attacker can break into any house,
but because there are less of those attackers, protecting against the low
expertise attacker provides a high-level of protection. That is why most
people lock their doors and windows and possibly install an alarm system.
On the Internet, the script kiddy attackers are at a level of sophistication
where they know how to get in if there are no locks, but companies are
still in the mindset of 100 years ago where none of the doors had locks
and some of the entrances did not even have doors. Yes, the problem is
that bad, and until companies realize the large number of attackers with
low sophistication and protect against those basic attacks, there will
continue to be a big problem. As long as sites are connected to the

Internet, they will never be 100 percent secure, but we need to get that
number to at least the low 90th percentile. Today, most companies are
probably below 50 percent secure, which is being optimistic. For their
enterprises to be secure, companies need to change their mindset on how
they look at the Internet.
Attacks Are Easy to Obtain and Easy to Use
Not only are systems easy to break into, but the tools for automating
attacks are very easy to obtain on the Internet. Even though an attacker
might have a minimal amount of sophistication, he can download tools
that allow him to run very sophisticated attacks. The ease at which these
tools and techniques can be obtained transforms anyone with access to
the Internet into a possible attacker. If you can use a computer, you can
compromise systems using complex attacks, without even realizing what
you are doing.
Boundless Nature of the Internet



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Another issue is the ease in which a user connected to the Internet can
travel across local, state, and international boundaries. Accidentally typing
one wrong number in an IP address can be the difference of connecting to
a machine across the room and connecting to a machine across the world.
When connecting to a machine outside this country, international
cooperation is required to trace the connection. Based on the ease of
connecting to a machine anywhere in the world, attackers can hide their
path by hopping through several computers in several countries before
attacking a target machine. In many cases, picking countries that are not

allies can almost eliminate the possibility of a successful trace.
For example, if an attacker wants to connect to a machine in California, he
can connect directly to that machine, which only takes a couple of seconds
but enables someone to easily trace it back to him. On the other hand, if
he spends a couple of minutes, he can connect to a machine in England,
connect to a machine in Russia, one in France, then the Middle East, then
Israel, the Far East, and then California. In this case, it is almost
impossible to successfully trace the attack back to the attacker. First, it
takes a lot of time, and second, it requires timely cooperation among all
the regions, which would be difficult at best.
Vast Pool of Resources
Not only does the Internet make it easier for attackers to break into
systems or commit crimes, it makes it easier for people to learn how.
Attackers have access to a large number of systems that can be
compromised, but they also have access to a huge amount of people and
resources that can show them how to commit a crime. If an attacker
wants to compromise a particular operating system that he is not familiar
with, he can either spend months researching it or he can access the
Internet and find out what he is looking for in a matter of minutes.
Because of the sheer number of resources that are at an attacker’s
disposal, his job becomes that much easier.
No one Is Policing the Internet
Currently, because there is no one policing the Internet, when problems
occur, there are not clear lines over who should investigate and what
crime has been committed. Most states are trying to take conventional
laws and apply them to the Internet. In some cases, they apply, but in
other cases they do not adapt well. Even if there were an entity policing
the Internet, it would still be difficult because people are committing the
crimes virtually. To get pulled over for speeding, I physically have to get
in a car and commit the crime. With the Internet, I am committing a crime

virtually, which makes it more difficult to track and prosecute.
Companies Don’t Report



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Another major concern is that very few attacks get reported. I call this the
iceberg effect, because when you look at the problem from the surface, it
is not that bad considering the Internet is fairly new. On the other hand, if
you look below the surface, there is a huge problem. There are two main
reasons why most attacks go unreported: ignorance and bad publicity.
Ignorance
First, companies do not realize that they are being attacked. This is a
major problem and can cause a lot of damage for a company. Even if a
company cannot prevent an attack, if it can detect it in a timely manner, it
can minimize the amount of damage caused. Not being able to detect it at
all not only causes major problems for the company, but also can cause
major problems for other companies because one site can be used as a
launching pad for other attacks.
This is one of the huge problems with protecting a site against Denial of
Service attacks. When a company has a Denial of Service attack launched
against it, there is little that it can do to protect against attacks in the
future. The way to protect against attacks is to make sure that no other
sites on the Internet can be used as a launching pad for these attacks. In
essence, the only way that your site can be secure is if every other site on
the Internet does the right thing. I don’t know about you, but relying on
millions of other sites for the security of my site doesn’t help me sleep
easy at night.

Bad Publicity
The second reason most attacks go unreported is fear—fear of bad
publicity. In most cases, as soon as a company reports a security breach,
it becomes public information. Imagine if the headlines on the front page
of the Washington Post were “Bank X Hacked—20 Million Dollars Lost!” I
don’t know about you, but if I were a member of that bank, I would
quickly withdraw my money and put it somewhere else. Most companies
understand that they would lose more money in bad press if they reported
the incident than if they did not report it and absorbed the loss into their
operating expenses. Also, most security incidents go unsolved, so why
report it, suffer the bad press, and not recover the lost revenue? This is
the worse scenario because not only does the company lose the money,
but it also gets the bad publicity. For these reasons, most companies are
very reluctant to report successful security breaches.
How Did It Get So Bad?
When the Internet became popular for commercial use, every company
looked at the benefits of using it. Executives got caught up in the
increased revenue they could earn with this new connectivity. Everyone



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looked at the positive side, but few looked at the negative side. Very few
people stepped back and considered the huge risk companies pose to
themselves and their customers by jumping so quickly into the Internet.
As with any problem, the longer it goes ignored, the worse it gets. Now
the problem continues to get worse, and companies have no choice but to
fix the problem or go out of business. Let’s look at some of the reasons

why the problem has escalated.
Y2K Issue
There was not a company in the world that was apathetic to the Y2K
problem. Because of the huge media attention drawn to Y2K, many
companies put all of their resources and efforts into solving the Y2K bug,
often ignoring all other issues. Several companies treated Y2K like it was
the only major threat to their company. Companies failed to realize that,
in the midst of preparing their machines for Y2K, they totally neglected
and sometimes increased their security risks in other areas.
Unfortunately, within the next year, several companies are going to see
the side effects of their Y2K resolutions. The method in which most
companies fixed their Y2K problem contradicted all well-known security
practices. First, most companies hired outside consultants to fix the
problem. Because the companies were in a rush to fix the problem as soon
as possible, most did not perform background checks on the consultants
and therefore had no idea who was working on their systems. To make
matters worse, most companies gave the people working on the problem
full administrator access to all systems; and because their employees
were so busy, they provided no supervision to what the consultants were
doing. Under normal circumstances, a company would never think of
doing this, but they did in the name of Y2K. What would have stopped an
attacker from putting a backdoor into a company’s systems so he could
access the resources whenever he wanted?
Second, because of time, most patches and updates that were made to
systems were not tested and verified, which means that basically any
program and/or virus could have been loaded onto the machines. Now
that Y2K is over, most companies believe that their systems successfully
became Y2K compliant, yet very few have any idea what is running on
their systems.
As I mentioned previously, there was nothing in place to stop an attacker

from putting a backdoor into a system for him to have access at a later
time. In most cases, if an attacker put a backdoor in, he would not go in
right away, but he might use that backdoor a year later. Even if the
company did detect the attack, it would never trace the attack back to the
changes that were made a year earlier. Based on how companies
approached or ignored security, many issues will have to be dealt with in



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the coming months and years. After you neglect a problem for so long,
when you finally address it, things get worse before they get better.
Companies have a hard time believing there is a security risk because of
the following three things:
•
It is currently happening.
•
It will continue to happen.
•
It is so subtle that by the time a company realizes there is a
problem, it is too late.
Companies liked the Y2K problem because it had a deadline, it had a
remedy, and after midnight on New Year’s Eve, the threat was gone. The
current Internet security problem is a totally different animal that very few
people understand. It is occurring as we speak, there is no deadline, and
there is no easy, straightforward way to protect against it. Over the next
couple of years, there is going to be a big change in the current landscape
of companies that are successful. Those that pay attention and adhere to

proper network security will rise ahead, and those that do not will fall by
the wayside. Unfortunately, the worst is yet to come.
Cost and Ineffectiveness of Fixing Existing Systems
The good news is that more and more companies are becoming aware of
security and are starting to take it seriously. The bad news is that it’s a
little too late, and the problem is going to get worse before it gets better.
There are several reasons for this, but one of the biggest is that when you
ignore a problem for so long, fixing it takes a lot of work.
Most people think about security as an afterthought. They decide to build
the network and later put in a firewall or other security measures. As
proven by the increase in attacks, this model is not efficient.
If this model were followed in the construction industry, the following
scenario would occur when building a house: The general contractor would
go in and frame the house. He would put the roofing, siding, and drywall
up and then paint and carpet the entire house. Next, the electrician would
rip out all of the walls, run the wiring for the electricity, put new drywall
up, and re-paint the walls. The plumber would then come in and go
through the same effort. As you can see, houses are not built this way for
three main reasons: it is inefficient, it is expensive, and the end product is
inferior. Yet, for some reason, people still build networks this way.
Security cannot be an afterthought; it has to be incorporated into the
network design from the beginning.
Intangible Nature of Security Benefits



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Another issue surrounding security is that when a company decides to

invest in security, the cost benefits are not tangible. If you invest in a new
network backbone, you can see an increase in speed. If you invest in new
servers, you can see an increase in performance. If you invest in security,
you minimize the chances of someone breaking into your site, but there
are no direct, tangible benefits that management can see.
This is problematic because most companies think that they haven’t had a
breach in security, and they wonder why they need to make the additional
investment. Their argument is because they haven’t had a breach in the
last year, why spend additional money to minimize the risk when they
spent no money last year and had no problems?
As you can see, this is an issue of awareness. Companies need to realize
that just because they have not detected a breach (even though they
weren’t looking) doesn’t mean that they haven’t had one. Until companies
start investing in security and integrating security closely with the
network, attacks like the distributed Denial of Service attacks that
occurred in February of 2000 will only become more frequent. Previously,
I had the opportunity to head up internal security for a large
telecommunications company. Initially, the company knew that security
was something it needed to address but it did not want to invest any
money in it. After much discussion, the company allocated an appropriate
budget for setting up security. After several years of not having a major
successful security breach, the company decided to cut the security
budget severely. The argument was based on the belief that, because
there were no breaches, it was wasting money on security.
This logic happens all too often but is wrong on so many fronts. It’s like
saying, “Why invest money in a new roof for our house when we’ve never
gotten wet in the last 10 years?” In this example, it is quite obvious that
the inside of the house was not wet because of the roof, which therefore
was a good investment.
As straightforward as this might seem, most companies do not follow this

logic when it comes to security. The reasoning behind the security
investment is this: If security breaches are not common in your company,
your security investment is working. In addition, because the current state
of affairs in network security is getting worse, you need to invest
additional resources. On top of that, because most companies have
neglected security for so long and are so far behind, they need to invest
even more resources so that they can not only catch up, but get ahead of
the curve. Until companies start realizing that security is an investment
they can’t afford not to make, the number of problems will increase.



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What Are Companies Doing?
You cannot open a national newspaper without reading about a breach in
security. It is interesting to remember that, even with all the talk about
network security or lack of security, a large percentage of companies still
do not report security breaches. There are two reasons for this. First,
most companies do not want the bad publicity associated with reporting a
breach. Second, and far more likely, most companies do not know when a
breach has occured. If a perpetrator gains access to a system and
compromises sensitive information without causing any disruption of
service, chances are the company will not detect it. Most companies
detect attacks that result in a disruption of service and/or negative
attention.
Reflect on the following scenario: Company A should have made a large
sum of money off of a new idea that it was the first to market on. Through
a breach in security, a competitor acquired the information and sold a

competing product. Company A should have made $40 million dollars but
only made $30 million because of the compromise in security. In this
example, unless a company had strong security to begin with, how could
it attribute the loss of funds to minimal network security? The loss would
be written off to other factors that had no relation to the real cause.
As you read through the examples in this book, some might sound a little
far fetched or ridiculous, but unfortunately, these examples represent the
current state of security within most companies, and stories like these are
all too common. Companies are so unprepared for the types of attacks
that are occurring that they look for an easy way out after they’ve been
hit. This lack of preparation is one of the biggest problems within the
current state of security.
Zero Tolerance
Some people say that a company will always be vulnerable unless it takes
a zero tolerance approach to hackers and blackmailing. This has some
validity, but the main concern of most executives is keeping their
company in business and profitable; therefore, a zero tolerance approach
does not always work. If companies were more prepared to deal with the
current threats and had some level of protection, they could fight back.
Unfortunately, companies are in such bad shape when it comes to security
that in many cases they have no choice but to give in or go out of
business. The following is an example supporting the fact that companies
cannot always take a zero tolerance approach to hacking.
A senior network administrator, Bob, was up for a promotion at a rapidly
growing company. After much discussion among company executives, Bob
was not only turned down for the position, but also given additional



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responsibilities without an increase in pay or a new job title. As a result of
his frustration and outrage, Bob went into work one weekend and digitally
encrypted all of the file shares and the last three weeks worth of backups,
enabling Bob to have the only key with the ability to decrypt the
company’s data. This meant that all of the company’s data was
unreadable without Bob’s key. The only non-encrypted backups that were
available were over a month old, which meant the usefulness of the
information was minimal. On Monday morning, Bob went to the Chief
Information Officer (CIO) and explained that unless he received a raise
complete with back pay, all of the data would remain unreadable.
This company had a zero tolerance policy for this type of behavior, which
resulted in the company not only refusing the request, but also forcing
legal action against Bob. The good news was that after many months in
court and high legal fees, they successfully prosecuted Bob. The bad news
was, because the company lost access to all of its information, it basically
had to start from scratch on most projects. As a result, the company lost
several clients, and unfortunately, the company went out of business
within eight months of the incident. In some cases, taking a zero
tolerance approach works, but because of potentially harmful results, it is
a hard decision for a company to make. Looking at the big picture, it
sometimes turns into a decision of whether the company wants to stay in
business or not.
As you can see, when a company’s security is weak, it is in no position to
negotiate. Again, the problem will continue to get worse before it gets
better.
Security Through Obscurity
Many companies also take the security through obscurity approach:
“Because no one knows about my network and no one really cares about

my company, why do I need security? No one would try to break in.” With
the ease of breaking into sites, this logic does not hold. Companies of all
shapes and sizes in all different business areas have been broken into.
Most companies have learned that when it comes to security, ignorance is
deadly.
If you believe that your company is so insignificant that attackers would
not want to break in, you are living under false pretenses. I have
registered small test sites by acquiring some IP addresses and registering
a domain name. Within two days of setting up the site, I was scanned
several dozen times and, in some cases, people attempted to break in.
This shows two important facts about the Internet. First, no site is too
small for someone to try to break into. Second, attackers are scanning the
Internet, and when new machines come online, they try to go after them



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figuring that a new site probably doesn’t have proper security—after all,
that’s the last thing most people address. In other words, if you are
setting up a new site, do not put it online until all of the security has been
implemented. Otherwise, you might be surprised.
Attempting to Fix Established Systems
Most people think about security as an afterthought. They build the
network and later put in a firewall or other security measures. With the
increase in attacks, however, this model is not efficient.
If a site has been online for any period of time and has not had proper
security, the company has to assume the worst. When trying to secure
existing systems, companies have to assume the systems have been

compromised. In a lot of cases, it makes more sense in terms of time and
money to save the data and rebuild the systems from scratch than trying
to patch a potentially compromised system.
Concentrating on an All or Nothing Approach
One major mistake that many people make is that they treat security as
all or nothing. If a company cannot achieve top-notch security, it gives up
and leaves its systems with no security. Companies need to realize that
some security is better than none, and by starting somewhere, they
eventually will get to the point where they have a very secure site.
Also, in most cases, a small percentage of exploits account for a large
number of security breaches. Therefore, by providing some level of
protection, you can increase your security tremendously against the
opportunistic hacker.
What Should Companies Be Doing?
Companies are embracing the Internet for most aspects of their business,
but they are looking at it from a purely functional standpoint. Does the
application that is using the Internet have the proper functionality it needs
to be profitable? That question is definitely a good start, but companies
need to change their mindset and put security in the picture. Security is
one of those measures that if you wait until you need it, it’s too late. It is
equivalent to not having a phone and saying that you will get one when
you need it. But if you wait until you have an emergency and you need to
call an ambulance, it’s too late to get a phone. You need to have a phone
in place so that when a potential emergency arises, you can minimize the
effect by calling for help immediately. The proper security mechanisms
need to be in place so that when a breach occurs, you can react
accordingly and minimize the effect it has.